Tag Archives: Mekong river dams

A stop light for Lao hydropower is a chance to make a right turn towards renewables

Image: ADB Flickr account

On August 7, the government of Laos officially suspended consideration of all new dams in order to review its hydropower strategy in response to the safety vulnerabilities exposed by the tragic collapse of the Xepian Xe Namnoy Dam in Laos on July 23. This is a turning point for the Lao leadership, who have long pinned hopes for Laos’s development on being the “Battery of Southeast Asia” by exporting hydroelectricity to markets in neighboring markets in Thailand and Vietnam.

This pause creates a window of opportunity for Laos to reconsider the dominant role of hydropower in the country’s energy mix at the same time as alternative and less risky energy sources such as solar, wind, and biomass are becoming economically competitive options. Transitioning to a more diverse mix of energy would provide put Laos on the path towards being a greener “battery” and would ultimately greatly reduce food security, environmental, and natural disaster risks to the Mekong region as a whole.

The dam breach happened at a point where the government of Laos still has an opportunity to choose a different and more sustainable path: only approximately 6,000 MW of a potential 18,000 MW of technically feasible hydropower dams have been constructed inside the country. An additional 5,000 MW of dams are now facing a construction pause for safety examinations, and some—like the Pak Beng Dam—are paused due to uncertainty on the part of the power purchaser. Ultimately, this is still only a portion of the Lao government’s goal planned full buildout and opens the door to meeting export goals through a more diverse mix of alternative options. Laos has approximately 8,800 MW of solar potential, and another 2,200 MW of high quality wind potential. There is significant scope for Laos to take advantage of the dropping prices in reconsidering the makeup of its future energy mix.

Solar (left) and wind (right) endowments for Laos, Cambodia, and Vietnam.

Non-hydropower renewable options are gaining traction globally. The prices of utility-scale solar and wind have dropped approximately 85% and 65% respectively since 2009, and this drop is continuing. Utility-scale solar price in the United States dropped 30% from 2016 to 2017, and bids on solar and wind plants around the world regularly set new records: since 2017, we’ve seen solar lows in the United States of 2.3 c/kWh, in India of 3.6 c/kWh, and the UAE at 2.94 c/kWh while Mexico signed a contract for wind at 1.77 c/kWh and Saudi Arabia saw bids as low as 2.1 c/kWh for its first onshore wind project. In many cases, these records are not only for new low solar prices but for low overall electricity price.

The rise of renewables is already impacting Laos’s neighborhood: Thailand’s solar capacity has more than doubled since 2014 to more than 3,300 MW, and Thailand’s wind capacity is just over 600 MW as of late 2017. This puts Thailand more than halfway towards its 2036 solar target of 6,000 MW, a fifth of the way towards its wind target of 3,000 MW, and squarely establishes it in the leading position for new renewables in all of ASEAN. Thailand’s Ministry of Energy has already raised the 2036 non-hydro renewable energy target from an original target of 20% to 30 and has dropped a Feed-in-Tariff that stimulated growth in the sector to only 7.2 c/kWh, which is close to grid parity pricing. Thailand’s adoption of clear policy has made a clear business case for investment, which is why Thai companies plan to invest $3.9 billion in non-hydro renewables in 2018.

The policy and financing environment in Laos and Cambodia is not yet as welcoming or conducive to these record prices, and the local low prices for pilot solar projects currently stand around 8 – 9 c/kWh. However, significant price drops in these less mature markets is only a matter of time and depends largely on the timeframe for regulators clarifying the policy framework and opening bids for competitive tender. As the investment environment improves and perceived risk of these projects drops, financiers will begin offering better loan terms. On average, open auctions drop selling the price of electricity by 35 – 50% just in the first year by increasing competition for the tenders and pushing companies to cut costs. It is not unlikely to expect that prices in Laos would follow this trend if supportive policies were adopted.

Internationally and on a levelized cost of electricity, unsubsidized solar and wind are both already outcompeting coal. New commercially-viable hydropower projects in Laos, which are often more technically difficult and remote than earlier and cheaper projects, are coming online upwards of 7 c/kWh. Even a conservative price drop of one third in the solar price in Laos would put solar in a competitive position vis-à-vis new hydropower. A power expansion study led by experts at UC Berkeley’s Energy and Resources Group indicates that the least-cost development scenario for Laos’s power grid through 2030 would start replacing hydropower with a mix of wind, solar, and biomass by 2021. This more diverse scenario would avoid most planned dams and coal plants and would need $2.6 billion less investment than the business-as-usual scenario under the current government inventory of projects.

The price drops both make solar and wind more financially attractive and raise questions about the long-term competitiveness of planned hydropower and coal projects in a rapidly changing regional energy market. Laos’s development plans depend on the sale of electricity to markets abroad, and a shift in the way that buyers in Thailand and Vietnam think about their power mix is may have long-term implications for Laos. Thailand’s success with renewable energy is spurring a re-think of the national power development plan, and planners may consider replacing imports from comparatively expensive and controversial hydropower from Laos with domestically available renewable energy. Some experts have indicated privately that Thailand may significantly reduce its plan to purchase 10,000 MW of power from Laos.

If Thailand is out of the buying market, Vietnam is the only other neighbor with the capacity to buy from Laos’s battery—and Vietnamese stakeholders are understandably reluctant to purchase from hydropower which will have devastating impacts on the agriculturally productive and economically important Mekong Delta. At the same time, Vietnam’s energy demand is still high even in a region facing skyrocketing energy demand due to urbanization and industrialization.

Therein lies a contradiction as well as an opportunity: there is no reason that Vietnam cannot increase its power purchase from Laos as long as it is purchasing from a diverse and sustainably developed portfolio of power projects. The pause on new hydropower development in Laos provides an opportunity not only to the government of Laos to diversify its electricity supply, but also for policymakers in Vietnam to protect the Mekong Delta without infringing on the sovereignty of its neighbor. If Vietnam were to support investment and sign power purchase agreements for a mix of strategically sited dams and non-hydropower renewables, it could provide Laos with much-needed revenue and meet its own energy needs in southern Vietnam by negotiating to replace the worst-performing dams with wind and solar projects.

Taking the off-ramp from the business as usual, hydropower-heavy scenario is very possible for Laos because investor interest in this alternate portfolio already exists even though Laos has not yet adopted policies that lay out a clear pathway for non-hydropower renewable investments. Thai company Impact Energy Asia is pursuing a 600 MW wind farm in southern Laos, American company Convalt Energy is moving ahead with 300 MW of solar and is in talks for up to 700 MW more, and many investors are expressing interest in “floatovoltaic” solar plants that would sit on reservoirs in central and southern Laos.

The pause on hydropower construction provides the time for Lao officials to work with neighbors in Vietnam to hammer out what an alternative future would look like and lay out directions and a map to get there. Doing so would avoid risks, position Laos to be a greener and more sustainable long-term “battery” for regional development, and would ultimately mitigate long-term food, water, and security risks for the Mekong region as a whole.

Courtney Weatherby is a Research Analyst with the Southeast Asia program at the Stimson Center. Her research focuses on infrastructure development, climate change, and energy issues in Southeast Asia, particularly the food-water-energy nexus in the Mekong River basin and China’s investment in regional energy infrastructure. 

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Filed under dams, Energy, Environment and sustainability, FEATURES, Laos, Mekong River, SLIDER, Sustainability and Resource Management

Water release at Yunnan dam sparks SE Asian alarm

Manwan Dam, Yunnan

A huge hydroelectric facility in southern Yunnan is causing tension between China and several of its downstream Southeast Asian neighbors. The Jinghong dam (景洪大坝), which stretches across the Mekong River, is currently discharging water in an effort to lower reservoir levels, raising the specter of flash flooding further south along the riverway.

On September 1, the Chinese government informed flood control authorities in Cambodia, Laos and Thailand that the dam would begin to release large amounts of excess water. The facility partially opened its floodgates September 5, releasing 535 cubic meters of water per second. Such activity is expected to continue through the end of the month.

Although this amount of water has yet to cause flooding in Laos or Thailand, both countries have issued public warnings as a precaution. Officials in both countries fear any further increase in outflow from the dam — which has the capacity to release up to 9,000 cubic meters of water per second — could have disastrous consequences. An unnamed official in Laos told website RFA river levels in the city of Houayxay — 200 kilometers south of the Jinghong dam — had risen noticeably but had so far not approached flood levels.

Thailand, which makes up more than 800 kilometers of the country’s northern border, is currently in the grips of its annual flood season. At least 28 provinces in the country’s north are already experiencing widespread inundations. Because of this, Thai flood control authorities are particularly wary of any increased flow along the river. Channel News Asia is reporting “the situation at the Chao Phraya dam, the main water gateway between the mountainous north and the central plains [of Thailand], are at a critical level”.

Further downstream in Cambodia and Vietnam, officials appear less concerned. No flood warnings related to the Jinghong dam water release have yet been issued in either country. However, a spokesman for Cambodian water conservancy group 3S Rivers Protection Network told reporters, “We know when an upstream dam opening its gates to release reservoir water combines with the heavy rains of wet season, it’s a high threat.”

The 1,750-megawatt hydropower plant, located roughly five kilometers north of the city ofJinghong, first went into operation 2008 following more than five years of construction. Power generated at the facility is used in Yunnan but is also often sent to energy-hungry Guangzhou or exported to Thailand.

Exemplified by the current situation in Jinghong, cross-border management of the Mekong — called the Lancang River (澜沧江) while flowing through China — is often a contentious issue. Mekong countries have, in the past, expressed frustration over how the river is handled inside China. Such concerns largely revolve around the wellbeing of the 48 million people who rely directly on the waterway for their food and livelihoods in Southeast Asia.

This article was written by Patrick Scally and originally posted on GoKunming.

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Filed under ASEAN, China, Energy, Mekong River, Regional Relations, SLIDER, water, Yunnan Province

Energy and Environmentalism on the Mekong: Time to Reach Across the Aisle

In recent years, two powerful narratives have emerged from mainland Southeast Asia. Generally speaking, discussions of the region focus around one of two topics: economic development and environmental degradation. For example, by typing “Mekong” into Google News the first page of results will show articles like this and this. As one can imagine, these two views of Southeast Asia are often in opposition and proponents of each rarely see eye to eye, sometimes going so far as to ignore the other side altogether. Recently, the battleground of these two narratives has been the construction sites of hydroelectric dams (both real and planned) that dot the Mekong River. Proponents of economic development see these dams as a necessary component to continued economic growth in the region. On the other hand, environmentalists point to the unknown ecological costs of the Mekong dams and argue that there are hidden costs to supposedly cheap hydropower. What is lost in the increasingly polarized game of right and wrong is a larger, more nuanced picture of the region and its needs. Some say that the Mekong needs dams while others argue that the region needs better protection measures for its natural resources. But what Southeast Asia really needs is for development fans and environmentalists to stop ignoring each other, and to restart the dialogue. Continue reading

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Filed under Economic development, Energy, Environment and sustainability, GMS, Mekong River, SLIDER, Sustainability and Resource Management, Uncategorized, water

The Growing Transport Network and Dams on in the Greater Mekong Subregion

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Filed under ASEAN, Current Events, Foreign policy, GMS, VISUALS, water

Earthquake hits Northwestern Yunnan: Update & Implications

In what is becoming a more and more frequent occurrence, an earthquake hit southwestern China’s Yunnan Province yesterday (Saturday, August 31). The earthquake, measured at a 5.9 on the Richter scale, struck near the town of Benzilan, located in Yunnan’s Deqin Tibetan Autonomous Region. Continue reading

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Where have all the fish gone? Killing the Mekong dam by dam

The Mekong, a river of wildly majestic fast-flowing currents flowing through six countries, has long enchanted explorers with its rich biodiversity second only to the Amazon.

It is home to the Giant Catfish, and at least 877 fish species sustaining food security for around 65 million people which make the Mekong the world’s most important centre of freshwater fisheries.

“For the people born on the Mekong, the river is like their blood—the principle of life,” says Dorn Bouttasing, a Lao environmental researcher.

Surely it is unthinkable that man would want to endanger or destroy the basis of such extraordinary natural wealth? Such invaluable natural resources, their infinite value defies any attempt to measure with a crude price tag.

My documentary Where Have All the Fish Gone? (Eureka Films) looks at the four Chinese hydropower dams that have been already built on the Lancang (The Chinese name for the upper Mekong), but its main focus is on the Lower Mekong basin shared by Laos, Myanmar, Thailand, Cambodia and Vietnam.

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Filed under Cambodia, China, Current Events, Economic development, Energy, Environment and sustainability, Food, Foreign policy, GMS, Governance, Laos, Mekong River, Sustainability and Resource Management, Thailand, Vietnam, water